To the scoreboard:
Dow: 21,987.56 +39.46 (+0.18%)
S&P 500: 2,476.55 +4.90 (+0.20%)
AUD/USD: 0.7949 +0.0003 (+0.04%)
ASX200 SPI futures (Sept contracts): 5,725 (+24)
1. North Korean war threat returns: Following North Korea’s weekend bomb test, US president Trump met with senior military officials who warned that an “overwhelming” US military response was on the table. Those developments have driven money into safe haven assets on currency markets to start the week, with the yen and Swiss franc both in demand this morning.
2. And spoils the party: The renewed geo-political tensions have rattled markets this morning after a solid session to end the week. US employment data missed estimates but the market largely shrugged it off. The US dollar remains weak, given the inflation outlook but it still rose against the euro. Bond yields were also higher and major stock markets rose as global manufacturing PMIs met expectations, confirming a reasonable backdrop for the global growth outlook.
3. AUD dollar lower in early trade: The Aussie outperformed most major currencies on Friday amid a risk-on environment, before hitting a ceiling just below US80 cents. Geo-political risks weighed on the Aussie at the open this morning, but a short time ago it was still holding above US79.6 cents. On the ASX200, futures traders have marked the local index higher but the North Korean war threat may also weigh on stock sentiment.
4. The week ahead: This morning there’s weekly CoreLogic house price data (10am AEST) and data from the ABS at 11:30am AEST which will give an indication as to how Q2 GDP will print. Wednesday’s GDP figures will headline a huge week of domestic data, summarised here in our weekly diary.
5. Bitcoin hit new heights… Before crashing. The cryptocurrency briefly hit $US5,000 for the first time before traders booked in gains, and it subsequently fell by almost 10%. A short time ago it was trading just above $US4,570. Off-shoot Bitcoin Cash traded more steadily and is holding its value above $US600.
6. Commodities wrap: Iron ore futures continued to surge ahead following the solid PMI data out of China last week. Gold closed on Friday up 2.6% for the week, and is higher again this morning amid the rising tensions with North Korea. Benchmark crude oil traded flat on Friday but finished the week higher at $US52.74 a barrel, following the production disruptions in the US from Hurricane Harvey.